So a government in a Capitalist state can’t just easily say “Produce fewer consumer goods because we want there to be more resources for heavy industry” because capitalists and small business owners alike would tell them to go get stuffed....

I think there is a difference between capitalism and a "Philosophy of Capitalism." A "capitalist" does not ipso facto hold any belief about capitalism. Rather, a capitalist is someone who credibly agrees to suffer some portion of any loss associated with a failed enterprise in exchange for some portion of any revenues earned by that enterprise. "Capitalist" is a post-hoc status assigned to anyone who engages in that activity. That person needn't believe that any other segment of the economy should operate in the same way.

The Philosophy of Capitalism - the Randian notion that laissez-faire capitalist activity should account for the production and rationing by price of all outputs of human endeavor - has nothing whatever to do with capitalism. People who hold to such a philosophy are outliers - fools taken seriously only by other fools. As are Communists.

Capitalist activity follows naturally from the idea of private property. If I can own something, I can risk it on a venture. Presumably, people who own enough things will risk some of them on ventures to acquire more property. The by-product is production of stuff that people want, because, otherwise, the venture would fail.

The big philosophical issue, therefore, is who, by participation in the market, will drive the decisions regarding what is made. So, for example, if the government gives money to people to spend, whatever those people want to spend it on will be what the capitalists "obediently" make. We can have "socialized" medicine or housing or education or whatever if we give people money to buy those things. Or we can just give people money, a UBI, and let them decide what to buy. Capitalists respond to demand, if the government has the good sense to create it.

Of course, there are limits on what can be produced. Resources are limited, and technologies are only as advanced as they are. The government can't issue even one usable unicorn certificate. But the government can influence what is made where there are available resources. General levels of scarcity/abundance determine how much purchasing power can be created other than as compensation for production. If, as is increasingly the case, we can make more than our producers will insist on consuming, we can "socialize" outputs. But that whole dynamic is contingent on scarcity/abundance, which is contingent on technology.

So, there is no absolute best amount of socialized demand. Places are different and times are different. All we can do is understand that, ideally, capitalism is about individuals taking risk, and socialism is about government creating demand. These are complementary, not competing, activities.